A-90833, DECEMBER 13, 1937, 17 COMP. GEN. 489

A-90833: Dec 13, 1937

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - BENEFICIARIES - CHANGE REQUIREMENTS AND DISPOSITION OF AMOUNT RECLAIMED FROM ENDORSERS OF FORGED CHECK WHERE CHECK IN PAYMENT OF RECORD BENEFICIARY OF A VETERAN'S ADJUSTED SERVICE CERTIFICATE WAS NEGOTIATED WITHOUT THE KNOWLEDGE OR CONSENT OF THE PAYEE. THE AMOUNT RECOVERED FROM ENDORSERS BECAUSE OF THE WRONGFUL NEGOTIATION MAY BY PAID TO THE RECORD BENEFICIARY WHOSE RIGHT TO AMOUNT DUE ON THE CERTIFICATE COULD BE LOST ONLY BY A CHANGE OF BENEFICIARY MADE IN ACCORDANCE WITH THE LAW AND REGULATIONS PROVIDING FOR SUCH CHANGE OR BY A CLEAR EXPRESSION IN WRITING BY THE VETERAN THAT THE ORIGINALLY DESIGNATED BENEFICIARY WAS NOT TO RECEIVE THE PROCEEDS OF THE CERTIFICATE.

A-90833, DECEMBER 13, 1937, 17 COMP. GEN. 489

VETERANS' ADMINISTRATION - ADJUSTED COMPENSATION - BENEFICIARIES - CHANGE REQUIREMENTS AND DISPOSITION OF AMOUNT RECLAIMED FROM ENDORSERS OF FORGED CHECK WHERE CHECK IN PAYMENT OF RECORD BENEFICIARY OF A VETERAN'S ADJUSTED SERVICE CERTIFICATE WAS NEGOTIATED WITHOUT THE KNOWLEDGE OR CONSENT OF THE PAYEE--- THE DIVORCED WIFE OF THE VETERAN--- BY ANOTHER ALLEGING TO BE THE VETERAN'S COMMON-LAW WIFE AND CLAIMING AS SUBSTITUTED BENEFICIARY BECAUSE OF ALLEGED ORAL DECLARATIONS OF THE VETERAN, THE AMOUNT RECOVERED FROM ENDORSERS BECAUSE OF THE WRONGFUL NEGOTIATION MAY BY PAID TO THE RECORD BENEFICIARY WHOSE RIGHT TO AMOUNT DUE ON THE CERTIFICATE COULD BE LOST ONLY BY A CHANGE OF BENEFICIARY MADE IN ACCORDANCE WITH THE LAW AND REGULATIONS PROVIDING FOR SUCH CHANGE OR BY A CLEAR EXPRESSION IN WRITING BY THE VETERAN THAT THE ORIGINALLY DESIGNATED BENEFICIARY WAS NOT TO RECEIVE THE PROCEEDS OF THE CERTIFICATE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE TREASURER OF THE UNITED STATES, DECEMBER 13, 1937:

YOUR LETTER OF JULY 21, 1937, AWS-C, REQUESTS TO BE ADVISED AS TO THE DISPOSITION TO BE MADE OF THE AMOUNT OF $654.76 RECOVERED FROM THE ENDORSERS OF CHECK NO. 260152 FOR $654.76, DRAWN OCTOBER 3, 1933, TO THE ORDER OF MRS. OTTIS WOOD, UNDER SYMBOL NO. 11-499 OF J. B. SCHOMMER.

THE CHECK COVERS AN AWARD APPROVED BY THE ADMINISTRATOR OF VETERANS' AFFAIRS, VETERANS' ADMINISTRATION, IN FAVOR OF MRS. OTTIS WOOD AS DESIGNATED BENEFICIARY OF THE ADJUSTED-SERVICE CERTIFICATE ISSUED TO BUD R. (REAGAN) WOOD, A-2171767, WORLD WAR VETERAN, WHO DIED AUGUST 16, 1933. AN INVESTIGATION CONDUCTED BY THE SECRET SERVICE DIVISION, TREASURY DEPARTMENT, AND OTHER FACTS OF RECORD, DISCLOSED THAT THE PAYEE MARRIED THE VETERAN IN DECEMBER 1922 AND AFTER SEVERAL TEMPORARY SEPARATIONS FINALLY SEPARATED FROM HIM IN 1930, SECURED A DIVORCE, AND MARRIED L. L. HUTSON, HER PRESENT HUSBAND. HOWEVER, IT APPEARS THAT BOTH PRIOR AND SUBSEQUENT TO THE FINAL SEPARATION THE VETERAN CONSORTED WITH ONE BILLIE JOHNSON, WITH WHOM HE WAS LIVING AT DATE OF DEATH.

IN JANUARY 1925 THE VETERAN APPLIED FOR BENEFITS UNDER THE WORLD WAR ADJUSTED COMPENSATION ACT, AT WHICH TIME HE DESIGNATED HIS WIFE, MRS. OTTIS WOOD, AS BENEFICIARY OF HIS ADJUSTED-SERVICE CERTIFICATE. DURING THE COURSE OF THE INVESTIGATION THE SECRET SERVICE OPERATIVE INTERVIEWEDT. E. GENTRY, THE SECOND ENDORSER ON CHECK NO. 260152, WHO INFORMED THE OPERATIVE THAT PRIOR TO THE VETERAN'S DEATH THE LATTER INTRODUCED BILLIE JOHNSON AS HIS WIFE AND ASKED MR. GENTRY TO AID HER IN OBTAINING FINAL PAYMENT ON HIS ADJUSTED-SERVICE CERTIFICATE. AFTER THE VETERAN'S DEATH MR. GENTRY ARRANGED FOR HIS BURIAL WITH THE UNDERSTANDING THAT THE CHECK TO BE ISSUED FOR THE AMOUNT DUE ON THE VETERAN'S ADJUSTED-SERVICE CERTIFICATE WOULD BE MAILED IN CARE OF EVERETT AND SONS, CONROE, TEX., WITH WHICH FIRM HE WAS CONNECTED AS VICE PRESIDENT. IN FURTHERANCE OF THIS AGREEMENT BILLIE JOHNSON, AIDED BY MR. GENTRY, EXECUTED AND FORWARDED TO THE VETERANS' ADMINISTRATION A DEMAND FOR PAYMENT OF AMOUNT DUE ON THE ADJUSTED-SERVICE CERTIFICATE AS THE WIFE OF BUD R. WOOD. CHECK NO. 260152 WAS DRAWN TO THE ORDER OF MRS. OTTIS WOOD, THE BENEFICIARY OF RECORD, AND WAS SENT IN CARE OF EVERETT AND SONS. MISS JOHNSON ADMITTED TO THE SECRET SERVICE OPERATIVE WHO INTERVIEWED HER THAT SHE NEGOTIATED THE CHECK BY FORGING THE PAYEE'S ENDORSEMENT AND STATED SHE APPLIED THE PROCEEDS THEREOF IN PAYMENT OF THE VETERAN'S DEBTS. MISS JOHNSON INFORMED THE SECRET SERVICE OPERATIVE THAT SHE "KEPT COMPANY" WITH THE VETERAN FROM 1924 TO MARCH 17, 1930, AT WHICH TIME THEY ASSUMED A COMMON-LAW-MARRIAGE STATUS WHICH CONTINUED UNTIL THE VETERAN'S DEATH. SHE ALSO STATED THAT THE VETERAN TOLD HER THAT HE WANTED HER TO RECEIVE ANY PAYMENT THAT WOULD BE MADE ON HIS CERTIFICATE. HOWEVER, IT IS IMPORTANT TO NOTE THAT NOTWITHSTANDING THE VETERAN'S RELATIONSHIP WITH MISS JOHNSON APPARENTLY SINCE 1924, HE DESIGNATED HIS LAWFUL WIFE, MRS. OTTIS WOOD, AS HIS BENEFICIARY WHEN HE APPLIED FOR HIS CERTIFICATE IN JANUARY 1925. THERE IS FOR NOTING FURTHER THAT EVEN AFTER THE VETERAN AND MISS JOHNSON LIVED TOGETHER AS MAN AND WIFE THE VETERAN APPARENTLY TOOK NO ACTION TO ADVISE THE VETERANS' ADMINISTRATION OF HIS INTENT TO CHANGE THE ORIGINALLY DESIGNATED BENEFICIARY OF HIS CERTIFICATE. FOR THAT REASON UPON THE DEATH OF THE VETERAN AN AWARD WAS MADE BY THE ADMINISTRATOR OF VETERANS' AFFAIRS, VETERANS' ADMINISTRATION, IN FAVOR OF MRS. OTTIS WOOD, THE ORIGINALLY DESIGNATED BENEFICIARY, IN ACCORDANCE WITH THE TERMS OF THE WORLD WAR ADJUSTED COMPENSATION ACT, AS AMENDED, WHICH PROVIDES IN PART AS FOLLOWS:

* * * THE AMOUNT OF THE FACE VALUE OF THE CERTIFICATE * * * SHALL BE PAYABLE * * * TO THE BENEFICIARY NAMED * * *.

THE ACT ALSO PROVIDES THAT A VETERAN UNDER REGULATIONS PRESCRIBED BY THE ADMINISTRATOR OF VETERANS' AFFAIRS MAY FROM TIME TO TIME WITH THE APPROVAL OF THE ADMINISTRATOR, CHANGE HIS BENEFICIARY, AND REGULATION 3716 OF THE VETERANS' ADMINISTRATION PROVIDES THAT A CHANGE OF BENEFICIARY OF AN ADJUSTED-SERVICE CERTIFICATE TO BE VALID MUST BE MADE AS FOLLOWS:

(A) BY NOTICE SIGNED BY THE VETERAN, OR HIS DULY AUTHORIZED AGENT, AND DELIVERED OR PROPERLY MAILED TO THE (VETERANS' ADMINISTRATION) DURING THE LIFETIME OF THE VETERAN. SUCH CHANGE SHALL NOT TAKE EFFECT UNTIL APPROVED BY THE (ADMINISTRATOR) AND AFTER SUCH APPROVAL THE CHANGE SHALL BE DEEMED TO HAVE BEEN MADE AS OF THE DATE THE VETERAN SIGNED SAID WRITTEN NOTICE AND CHANGE, WHETHER THE VETERAN BE LIVING AT THE TIME OF SAID APPROVAL OR NOT.

(B) OR BY LAST WILL AND TESTAMENT OF THE VETERAN, DULY PROBATED. SUCH CHANGE SHALL NOT BE EFFECTIVE UNTIL RECEIVED BY THE (VETERANS' ADMINISTRATION) AND APPROVED BY THE (ADMINISTRATOR) AND AFTER SUCH APPROVAL THE CHANGE SHALL BE DEEMED TO HAVE BEEN MADE AS OF THE DATE OF DEATH OF THE VETERAN. (PROVIDED THAT A CHANGE OF BENEFICIARY SIGNED SUBSEQUENT TO THE DATE UPON WHICH THE WILL WAS EXECUTED AND DELIVERED IN ACCORDANCE WITH SUBPARAGRAPH (A) OF THIS PARAGRAPH SHALL, IF APPROVED, IN ACCORDANCE WITH REGULATIONS, TAKE PRECEDENCE OVER THE DESIGNATION BY WILL.)

PROVIDED, HOWEVER, THAT ANY PAYMENT MADE TO A BENEFICIARY OF RECORD, BEFORE NOTICE OF CHANGE OF BENEFICIARY HAS BEEN RECEIVED IN THE (VETERANS' ADMINISTRATION) AND APPROVED BY THE (ADMINISTRATOR) SHALL NOT BE MADE AGAIN TO THE CHANGED BENEFICIARY (JULY 26, 1933).

THE ONLY DECLARATION OF THE VETERAN'S INTENTION TO CHANGE HIS BENEFICIARY IS ALLEGED TO HAVE BEEN MADE ORALLY AND THEN ONLY TO THE PERSONS INVOLVED IN THE NEGOTIATION OF CHECK NO. 260152, NAMELY, THE FORGER, BILLIE JOHNSON, AND THE SECOND ENDORSER, T. E. GENTRY. OBVIOUSLY, THE STATEMENTS OF THESE INTERESTED PARTIES ARE INSUFFICIENT TO WARRANT ANY ACTION WHICH WOULD DEFEAT THE RIGHTS OF THE ORIGINALLY DESIGNATED BENEFICIARY, AS TO WHOSE IDENTITY NO DOUBT EXISTS. HER RIGHTS TO THE AMOUNT DUE ON THE CERTIFICATE COULD BE LOST ONLY BY A CHANGE OF BENEFICIARY MADE IN ACCORDANCE WITH THE LAW AND REGULATIONS PROVIDING FOR SUCH CHANGE OR BY AN INTENTION BEING CLEARLY EXPRESSED IN WRITING BY THE VETERAN HIMSELF THAT THE ORIGINALLY DESIGNATED BENEFICIARY WAS NOT TO RECEIVE THE PROCEEDS OF THE CERTIFICATE, IN WHICH LATTER EVENT THE PROCEEDS OF THE CERTIFICATE ARE PAYABLE TO THE ESTATE OF THE VETERAN AS THOUGH NO BENEFICIARY HAD BEEN DESIGNATED. NEITHER OF THESE CONDITIONS ARE DISCLOSED IN THE INSTANT CASE. 9 COMP. GEN. 344; ID. 495.

IN THE CIRCUMSTANCES SINCE THE CHECK WAS ADMITTEDLY NEGOTIATED BY BILLIE JOHNSON WITHOUT THE KNOWLEDGE OR CONSENT OF THE PAYEE, YOU ARE ADVISED THAT THE AMOUNT RECOVERED FROM THE ENDORSERS THEREOF SHOULD BE TRANSMITTED TO THE RIGHTFUL PAYEE, NOW MRS. L. L. HUTSON, WHO HAS BEEN ADMINISTRATIVELY REPORTED AS ENTITLED THERETO.